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Hays formulates a test structure where the decision rule is to reject the null hypothesis if the calculated test statistic is either larger than the upper tail critical value or lower than the lower tail critical value. At a 5% significance level with 57 degrees of freedom, assume that the two-tailed critical t-values are tc = ±2.004. Based on this information, Hays makes the following conclusions:

  • Point 1: The intercept term is statistically significant.
  • Point 2: Both independent variables are statistically significant in the model explaining sales for Milky Way, Inc.
  • Point 3: If an F-test were being used, the null hypothesis would be rejected.
Which of Hays’ conclusions are CORRECT?


A. Points 1 and 3.
B. Points 1 and 2.
C. Points 2 and 3.
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